Financial and manufactured capital
Revenue
R0.51bn
2020: R1.16bn
Group operating costs
R570m
2020: R736m
Impairments
R417.4m
2020: R391.6m
Net loss
R804.6m
2020: R486.6m
Development highlights
Cost containment was a key focus area in the past financial year. While it could not prevent the large-scale impact of the pandemic and various lockdown measures on revenues, it mitigated CLHG’s losses for the year.
OCCUPANCY PERFORMANCE
The group’s performance depends on its ability to maintain or improve occupancies at its 63 hotels. The Covid-19 pandemic significantly reduced global travel and consumer demand for hotels, resulting in a material slowdown in global commercial activity across the hospitality and travel industries.
Occupancies based on total inventory have steadily improved from the last quarter of the 2020 financial year, which ended on 4% occupancies, to 7% in July 2020 when the group reopened a total of 36 hotels. CLHG ended the financial year in June 2021 with a monthly occupancy of 25% in the midst of the third wave of infections and adjusted level 4 restrictions. Occupancy for the group was 19% of the total hotel inventory, compared to 38% in 2020 and 55% in 2019. A total of 53 hotels were open on 30 June 2021.
With minimal international travel allowed throughout the period under review, the emphasis has been on boosting domestic travel, both business and leisure. At present, approximately 77% of our guests are business travellers of which 8% are government travellers. Given the impact of Covid-19, the weak economy and continued low business confidence levels, business travel remains under pressure, while leisure travel is negatively affected by the climbing unemployment rate.
| 30 June 2021 |
30 June 2020 |
30 June 2019 |
30 June 2018 |
|
|---|---|---|---|---|
| Average group
occupancies |
All hotels: 19% Open hotels: 26% |
38% | 55% | 59% |
| Average South African occupancies |
All hotels 21% Open hotels: 28% |
41% | 58% | 61% |
The group’s operating environment will continue to be challenging in the year ahead.
We are optimistic that demand will return in the first quarter of 2022 when the
vaccination programmes open up travel from international markets again. Regardless of
the outcome, CLHG’s BAR methodology will help to optimise demand and increase
occupancy.
AVERAGE DAILY RATES (ADR)
Average room rates reduced by 13% compared to the prior year (2020: increase of 2.2%; 2019: increase of 3.5%).
CLHG’s operating expenses and other costs decreased year on year as a result of stringent cost-cutting measures, including temporarily suspending services in some hotels as required by low demand.
One of the considerable challenges brought on by the pandemic was the discounting behaviour of other hotels as each struggled to maintain occupancy. It drove down room rates, with the 4- and 5-star accommodation providers cannibalising the 2- and 3-star markets. However, our cost-effective Road Lodge offerings remained popular during this time and the CLHG rates remained steady compared to pre-Covid-19 rates. All the City Lodge brands continue to offer value, as evidenced by moderate level of discounting compared to some of our peers.
HOTEL FOOTPRINT
As at 30 June 2021, the group operated 63 hotels spread across five brands, of which 52 are directly owned by CLHG.
| Brand | Number of hotels | Location | |
| Fairview Hotel | 1 | Kenya | |
|---|---|---|---|
| Courtyard Hotel | 5 | South Africa | |
| City Lodge Hotel | 21 | South Africa, Tanzania, Kenya, Mozambique | |
| Town Lodge | 13 | South Africa, Botswana, Kenya, Namibia | |
| Road Lodge | 23 | South Africa |
Future developments have been placed on hold in response to the cash constraints resulting from the pandemic.
While the group is on the lookout for opportunities to purchase land or hotels that may be in financial distress because of the pandemic, the sale of our four East Africa hotels post year-end provides an opportunity to get to a profitable position sooner. According to our projections, this region will take considerably longer than the southern African market to recover, so the decision to divest was a sensible one.
KEEPING OUR HOTELS IN GREAT SHAPE
CLHG follows a stringent refurbishment programme, although all non-essential capital expenditure was suspended during the financial year in light of the liquidity constraints brought on by the pandemic. As at 30 June 2021, this investment amounted to R2.7 million (2020: R4 million), expended primarily on rebranding and refurbishment works and the replacement of sundry furniture, fittings and equipment at other hotels. The Courtyard Hotel Rosebank’s refurbishment was completed in December 2020.
The group invested R74.6 million in new developments, particularly the construction of the new Courtyard Hotel Waterfall City and opening the City Lodge Hotel Maputo. By paying close attention to the changing needs of the market, the group ensures that its properties stay relevant and appealing. The rebranded City Lodge Hotel Eastgate (previously a Courtyard Hotel) retains its elegant and comfortable aesthetic, while appealing to business travellers who visit the area. Road Lodge Sandton (previously a Town Lodge) brings affordable, comfortable accommodation to price-conscious travellers to the area, augmenting the group’s other offerings. CLHG, therefore, offers accommodation to every potential guest, no matter their budget.
People caring for people – guest feedback
City Lodge Bloemfontein 
“I was originally planning to stop over in Colesberg on the long drive from Cape Town to Johannesburg; however, load
shedding in the Northern Cape put a stop to that idea and it was decided to continue for another two hours to Bloemfontein.
The City Lodge is a good mid-range hotel located just off the N1 and close to all the facilities and attractions that the Free
State capital has to offer. This was an unexpected stay and the first at this hotel for me since 2010. Rooms were well
appointed and very comfortable. It was a cold night in the Free State and the heating was very welcome. The property was
able to withstand the load shedding. Despite RSA being on Level 2 restrictions, the City Lodge was buzzing with a good
atmosphere and the restaurant was well patronised. Food in the restaurant was plentiful and delicious, all at reasonable
prices. The breakfast buffet had many options catering to all tastes and is highly recommended, if a little pricey at R140. Staff
were friendly and keen to help.”
~ Stephanie
“Clean rooms, secure and great staff, the receiving staff at Reception was the best of all, made me feel sooo welcome away
from home. The breakfast was ever so delicious. Please recognise the staff for their exceptional service.”
~ Gabriel
“This hotel has adapted to the Covid-19 challenge really well! We stayed over driving back from George to JHB. From the
moment we stopped, we felt safe. Staff are so friendly! Efficient! Very welcoming! Check-in was fast and efficient. Room was
clean! Comfortable! Tasty food! Value for money. Godfrey, our waiter, was just phenomenal! Even though it was a quick
stop-n-go, the experience was great. (Everything worked. My opinion: just the TV was in an awkward position.)”
~ Gavin